Shoprite Nigeria is shifting to a smaller-store model, planning to open standalone neighbourhood supermarkets as part of a recovery strategy following a temporary shutdown of its operations. The move, confirmed by Adekunle Adebiyi, Executive Director of Investments at MBO Capital Management Limited, an investor in the chain, aims to reduce operating costs and refocus investment on core supermarket activities.
Speaking on Nairametrics' Drinks and Mics programme on Friday, October 23, 2026, Adebiyi said three outlets have already resumed operations after the shutdown, which was used to renegotiate terms with suppliers and settle outstanding financial commitments. "We took a very, very drastic decision to just shut everything down whilst we negotiated with suppliers. Now three stores are back open," he said.
Neighbourhood Expansion Strategy
Adebiyi explained that the retailer intends to expand through standalone neighbourhood supermarkets rather than relying primarily on large shopping malls. "We're going to be opening standalone neighbourhood stores, which was always the plan," he said. The strategy is expected to lower operating expenses and allow the company to channel investments into supermarket operations instead of property development.
According to Adebiyi, supermarkets typically rent their premises and invest in equipment such as shelves and refrigeration systems. However, he noted that this model can complicate securing bank loans in Nigeria, where lenders often require tangible assets as collateral. He disclosed that MBO Capital encountered financing difficulties while acquiring Shoprite Nigeria because the business lacked sufficient physical assets to satisfy conventional lending requirements, despite generating billions of naira in revenue.
Dollar Rents and Technology Costs Strain Operations
Adebiyi identified foreign exchange volatility as another major challenge, revealing that about 17 of the retailer's 28 outlets had dollar-denominated rental agreements when the acquisition took place. The naira's depreciation subsequently increased rental expenses, placing additional pressure on the company's finances. He said rent should typically account for between 8% and 10% of a supermarket's revenue, but some Shoprite locations faced significantly higher costs.
The executive also highlighted inventory management problems and the loss of access to the enterprise resource planning system previously provided by the former parent company. Replacing the technology platform required billions of naira in additional investment, diverting resources that could have supported other business operations.
Ongoing Restructuring and Ownership Changes
Shoprite Nigeria's recovery efforts follow changes in ownership and years of difficult trading conditions. In June 2021, a consortium led by Persianas Investment Limited acquired the Nigerian business after South Africa's Shoprite Holdings decided to exit direct ownership. The operations subsequently continued under Retail Supermarkets Nigeria Limited through a franchise arrangement.
In March 2026, Shoprite told Nairametrics that it was not leaving Nigeria but implementing a phased restructuring programme that began in August 2025. The company had also disclosed plans to reopen outlets at The Palms Shopping Mall and Circle Mall in Lagos while exploring smaller store formats to reduce rent, electricity and diesel expenses.
Shoprite has yet to announce how many neighbourhood outlets it plans to establish, their proposed locations or when the expansion will begin.
